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Criticism of Walter’s Model In Dividend Theories

Criticism of Walter’s Model In Dividend Theories:

The following are some of the important criticisms against Walter model:

1. Walter model assumes that there is no extracted finance used by the firm. It is not practically applicable.

[Post Image Courtesy of StockImages at FreeDigitalPhotos.net]

2. There is no possibility of constant return. Return may increase or decrease, depending upon the business situation. Hence, it is applicable.

3. According to Walter model, it is based on constant cost of capital. But it is not applicable in the real life of the business.

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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